What Is a Collision Deductible Waiver, and When Does It Pay?

A collision deductible waiver is a small coverage with a precise job. Your collision coverage repairs your car, minus your deductible. When the driver who hit you had no insurance, the waiver pays that deductible so you are not out of pocket for someone else's uninsured driving.

Where it comes from

Insurance Code section 11580.26 says that a policy with collision coverage cannot be issued in California unless the named insured has been offered coverage under which the insurer pays the collision deductible after a collision between an insured vehicle and an uninsured motor vehicle. For a policy without collision, the required offer is uninsured motorist property damage for the insured vehicle, capped at the lesser of its actual cash value or a fixed dollar figure written into the section, and never including loss of use.

The offer is not required at all if the named insured has deleted uninsured motorist coverage entirely under section 11580.2. Offered does not mean included. You may decline it, and that choice carries forward through renewals and replacement policies with the same insurer, and through a reinstatement within 30 days of a lapse.

The conditions that decide whether it pays

1. Actual, direct physical contact between your vehicle and the uninsured one.
2. Identification: the owner or driver is identified, or the vehicle is identified by its license number.
3. Prompt notice: you or someone for you reports the accident to your insurer or its agent within 10 business days.
4. Legal entitlement: it is agreed, or decided by a single neutral arbitrator if you formally start arbitration within one year, that you are legally entitled to recover from the uninsured driver.

Who counts as "uninsured" here

For this section, a vehicle with no property damage liability insurance or bond, or whose insurer denies coverage, counts. A vehicle with at least the California minimum property damage limit does not, even if that limit falls short of your damage. Government-owned vehicles, self-insured vehicles and vehicles owned by anyone in your household are also outside the definition, while a vehicle whose insurer becomes insolvent can count.

A worked example, limits only

You carry collision with a $1,000 deductible and accepted the deductible waiver. An uninsured driver runs a stop sign and hits your door; you photograph their license and plate and tell your agent the next morning. The repair estimate is $5,000.

• Collision pays the repair less the $1,000 deductible.
• The deductible waiver pays the $1,000.
• If the same driver had sped off unidentified, the waiver would not apply, and the $1,000 would stay with you.

Is it worth taking?

It depends on two things you know better than anyone: how large your collision deductible is, and how comfortable you would be paying it after a crash you did not cause. The higher the deductible, the more the waiver is doing. It is also the one coverage where writing down a plate number at the scene directly decides whether you are paid.

Your insurer can also pursue the uninsured driver for what it paid; the section gives it three years from payment to bring that action. To see whether the waiver is on your current policy, look for a line near uninsured motorist on your declarations page, or ask us to quote it both ways.